Financial Services, Good for Business, Latvia, Rating
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Saturday, 23.11.2024, 01:54
Fitch affirms Latvia’s rating at 'A-'; outlook stable
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Fitch cited Latvia’s solid public finances, as well as
institutional resilience and reliable political structure ensured by members in
the European Union and the euro area as the main factors supporting Latvia’s
high credit rating.
Residents’ low income, as well as a higher instability of
gross domestic product and external debt as compared to other countries with
similar credit rating were mentioned as Latvia’s main issues.
Fitch noted that the Latvian economy grew by 4.8% last
year, recording the steepest growth in the last seven years. Latvia’s economic
growth was driven primarily by strong investment activity in the second half of
2018 thanks to the absorption of EU funding. Fitch projected investment growth
to slow down this and next year, which combined with weaker external demand is
likely to have a negative impact on Latvia’s economic growth.
The ratings agency forecast Latvia’s GDP growth at 3.1% for
this and next year. Fitch also expects Nordic banks to keep playing an
important role in Latvia, while developments in the non-resident banking
segment are not expected to have a significant effect on the banking sector.
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